REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of June 17,
1998, is made between OPEN PLAN SYSTEMS, INC., a Virginia corporation ("OPS"),
and GREAT LAKES CAPITAL, LLC, a Delaware limited liability company ("LLC").
W I T N E S S E T H:
WHEREAS, OPS and LLC have entered into a Management and Consulting
Agreement, dated as of June 17, 1998 (the "Consulting Agreement"), under which
LLC agreed to provide certain management and consulting services to OPS; and
WHEREAS, in consideration for such management and consulting services to be
provided by LLC under the Consulting Agreement, OPS has entered into a
Nonqualified Stock Option Agreement with LLC, dated as of June 17, 1998 (the
"Stock Option Agreement"), for the purchase by LLC of up to 600,000 shares (the
"Option Shares") of the Common Stock, without par value, of OPS (the "Common
Stock"); and
WHEREAS, in connection with the execution of the Consulting Agreement, OPS
has issued 200,000 shares of Common Stock to LLC upon payment of the purchase
price therefor as stated in the Consulting Agreement (the "Common Shares"); and
WHEREAS, OPS has agreed to enter into this Agreement to provide certain
registration rights to LLC in order to facilitate the resale of the Option
Shares, the Common Shares and certain additional shares of Common Stock that LLC
and its Affiliates may acquire following the date of the Consulting Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the Consulting Agreement, OPS and LLC hereby agree as
follows:
ARTICLE I
Definitions
For purposes of this Agreement, the following terms have the following
meanings:
(a) "Additional Shares" shall mean shares of Common Stock that LLC and its
Affiliates may acquire following the date of the Consulting Agreement on the
open market, in privately negotiated transactions and/or directly from OPS so
that LLC and its Affiliates would beneficially own no greater than 21.0% of the
issued and outstanding shares of Common Stock on a fully diluted basis; provided
that shares of Common Stock that LLC and its Affiliates may acquire pursuant to
OPS's 1996 Stock Incentive Plan and 1996 Stock Option Plan for Non-Employee
Directors shall not be deemed to be Additional Shares.
(b) "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
under the Exchange Act as in effect on the date of this Agreement.
(c) "Blue Sky Filing" shall mean a filing made in connection with the
registration or qualification of the LLC Shares under a particular state's
securities or blue sky laws.
(d) "Common Shares" shall have the meaning set forth in the recitals to
this Agreement.
(e) "Common Stock" shall have the meaning set forth in the recitals to this
Agreement.
(f) "Consulting Agreement" shall have the meaning set forth in the recitals
to this Agreement.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "LLC Shares" shall mean collectively (i) the Common Shares, (ii) the
Option Shares, (iii) the Additional Shares and (iv) such additional shares of
Common Stock that OPS may issue with respect to such shares pursuant to any
stock splits, stock dividends, recapitalizations, restructurings,
reclassifications or similar transactions.
(i) 'Nasdaq National Market" shall mean the National Market System of The
Nasdaq Stock Market, Inc.
(j) "Option Shares" shall have the meaning set forth in the recitals to
this Agreement.
(k) "Person" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act as in effect on the date of this Agreement.
(l) "Prospectus" shall mean the prospectus included in the Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the LLC Shares covered by such Registration Statement, and all other
amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in any such prospectus.
(m) "Registration Expenses" shall mean any and all out-of-pocket expenses
incident to OPS's performance of or compliance with this Agreement, including,
without limitation, (i) all registration and filing fees with the SEC and the
National Association of Securities Dealers, Inc., (ii) all fees and expenses of
complying with state securities or blue sky laws, (iii) all printing, messenger
and delivery expenses, (iv) all fees and expenses incurred in connection with
the listing of the LLC Shares on the Nasdaq National Market, or any other
exchange or automated interdealer quotation system as then applicable, (v) the
fees and disbursements of OPS's counsel and of its independent public
accountants, and (vi) the fees and expenses of any special experts retained by
OPS in connection with the requested registration; provided that such expenses
shall not include (x) any fees or disbursements of counsel to LLC or any
underwriter and (y) any brokerage commissions and fees, underwriting discounts
and commissions, transfer taxes and documentary stamp taxes, if any, relating to
the sale or disposition of the LLC Shares.
(n) "Registration Statement" shall mean the registration statement of OPS
under the Securities Act that covers the resale of the LLC Shares pursuant to
the terms of this Agreement, including the related Prospectus, all amendments
and supplements to such registration statement, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference in any such registration
statement.
(o) "SEC" shall mean the Securities and Exchange Commission.
(p) "Securities Act" shall mean the Securities Act of 1933, as amended.
(q) 'Stock Option Agreement" shall have the meaning set forth in the
recitals to this Agreement.
ARTICLE II
Registration of Securities
Section 2.1. Securities Subject to this Agreement. The securities entitled
to the benefits of this Agreement are the LLC Shares. For the purposes of this
Agreement, one or more of the LLC Shares will no longer be subject to this
Agreement when and to the extent that (i) a Registration Statement covering such
LLC Shares has been declared effective under the Securities Act and such LLC
Shares have been sold pursuant to such effective Registration Statement, (ii)
such LLC Shares are distributed to the public pursuant to Rule 144 under the
Securities Act, (iii) such LLC Shares shall have been otherwise transferred or
disposed of, new certificates therefor not bearing a legend restricting further
transfer or disposition shall have been delivered by OPS and, at such time,
subsequent transfer or disposition of such securities shall not require
registration or qualification of such LLC Shares under the Securities Act or any
similar state law then in force, or (iv) such LLC Shares have ceased to be
outstanding.
Section 2.2. Registration Requirements.
(a) Following the expiration or termination of the Consulting Agreement,
LLC shall be entitled to request that OPS effect the registration of the LLC
Shares in accordance with this Section 2.2. Such request shall be made prior to
the date that is five years after the date of this Agreement and shall be in
writing to OPS at the address and in the manner determined in accordance with
Section 5.1 hereof. Such written request shall set forth the names and addresses
of LLC and any Affiliate of LLC that owns, either beneficially or of record, any
LLC Shares and the amount of LLC Shares to be sold by such holder. The demand
registration rights granted pursuant to this Section 2.2 may be exercised only
by LLC on behalf of LLC and its Affiliates, and OPS shall not be required to
effect more than one registration of the LLC Shares.
(b) If all of the terms and conditions relating to the demand registration
have been met by LLC and its Affiliates, including, but not limited to, the
affirmative obligation of LLC and its Affiliates pursuant to Section 2.4 hereof
to provide correct and complete information regarding LLC and its Affiliates,
OPS agrees that it will use its best efforts to effect the registration of the
number of LLC Shares set forth in the written request from LLC. Such
registration shall be filed with the SEC as soon as practicable, but not later
than ninety (90) days after the receipt by OPS of the written request under
Section 2.2(a) above. In addition, OPS shall, as soon as practicable, list on
the Nasdaq National Market the Common Shares and reserve for listing, on a when
issued basis, the Option Shares issuable upon exercise of the options set forth
in the Stock Option Agreement.
(c) OPS shall use its best efforts to maintain the effectiveness of the
registration relating to the LLC Shares, and to maintain the listing of such LLC
Shares on the Nasdaq National Market or any exchange or automated interdealer
quotation system on which the Common Stock is then listed or quoted, for the
period from the effective date of the Registration Statement relating to such
LLC Shares to the date that is the earlier of (i) two years after the date by
which LLC has exercised all options set forth in the Stock Option Agreement and
(ii) seven years after the date of this Agreement.
Section 2.3 Piggy-Back Registration Rights.
(a) In the event that, prior to the expiration or termination of the
Consulting Agreement, OPS shall propose to file a registration statement under
the Securities Act relating to a public offering by or through one or more
underwriters of Common Stock for OPS's own account (other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor forms, or filed
in connection with an exchange offer or an offering of Common Stock solely to
existing shareholders or employees of OPS) and on a form and in a manner that
would permit the registration of the LLC Shares for sale to the public under the
Securities Act, OPS shall (i) give written notice to LLC of its intention to do
so and of the right of LLC and its Affiliates to have any or all of the LLC
Shares then held by LLC and its Affiliates included among the securities to be
covered by such registration statement and (ii) at the written request of LLC
given to OPS within 20 days after OPS provides such notice, use its best efforts
to include among the securities covered by such registration statement the
number of such LLC Shares that LLC and its Affiliates shall have requested be so
included (subject, however, to reduction in accordance with Section 2.3(b)
below).
(b) If the lead managing underwriter selected by OPS for an underwritten
offering pursuant to Section 2.3(a) above determines that marketing factors
require a limitation on the number of LLC Shares to be offered and sold by LLC
and its Affiliates in such offering, there shall be included in such offering
only that number of LLC Shares, if any, that such lead managing underwriter
reasonably and in good faith believes will not jeopardize the success of the
offering of all shares of Common Stock that OPS desires to sell for its own
account. In such event and provided that the lead managing underwriter has so
notified OPS in writing, the shares of Common Stock to be included in such
offering shall consist of (i) the securities that OPS proposes to sell, and (ii)
the number, if any, of LLC Shares requested to be included in such registration
that, in the opinion of such lead managing underwriter, can be sold without
jeopardizing the success of the offering of the shares of Common Stock that OPS
desires to sell for its own account.
(c) Nothing in this Section 2.3 shall create any liability on the part of
OPS to LLC if OPS for any reason should decide not to file a registration
statement proposed to be filed under Section 2.3(a) above or to withdraw such
registration statement subsequent to its filing, regardless of any action
whatsoever that LLC may have taken, whether as a result of the issuance by OPS
of any notice hereunder or otherwise.
(d) If any LLC Shares are to be included in any underwritten offering
pursuant to Section 2.3(a) above, LLC shall be a party to the underwriting
agreement between OPS and such underwriters, and LLC agrees to comply with the
terms and conditions that may be imposed on such offering by the underwriters.
Section 2.4. Registration Procedures. In order to comply with the
requirements of Section 2.2 above, OPS will:
(a) prepare and file with the SEC a Registration Statement covering the LLC
Shares on any SEC form or forms for which OPS then qualifies and that counsel
for OPS shall deem appropriate, and which form shall be available for the sale
of the LLC Shares in accordance with the intended methods of distribution
thereof;
(b) prepare and file with the SEC pre- and post-effective amendments to the
Registration Statement and such amendments and supplements to the Prospectus
used in connection therewith as may be necessary to maintain the effectiveness
of such registration, or as may be required by the rules, regulations or
instructions applicable to the registration form utilized by OPS, or by the
Securities Act or the rules and regulations thereunder, necessary to keep such
Registration Statement effective, and cause the Prospectus as so supplemented to
be filed pursuant to Rule 424 under the Securities Act, and otherwise comply
with the provisions of the Securities Act with respect to the disposition of the
LLC Shares;
(c) furnish to LLC (or any Affiliate of LLC that owns, either beneficially
or of record, any LLC Shares), and the underwriters if any, such number of
copies of the Registration Statement and each pre- and post-effective amendment
thereto, any Prospectus or Prospectus supplement and each amendment thereto and
such other documents as LLC (or any Affiliate of LLC that owns, either
beneficially or of record, any LLC Shares), and the underwriters if any, may
reasonably request in order to facilitate the transfer or disposition of the LLC
Shares by LLC (or any Affiliate of LLC that owns, either beneficially or of
record, any LLC Shares);
(d) make such Blue Sky Filings to register or qualify the LLC Shares under
such state securities or blue sky laws of such jurisdictions as LLC (or any
Affiliate of LLC that owns, either beneficially or of record, any LLC Shares),
and the underwriters if any, may reasonably request, and do any and all other
acts that may be reasonably necessary or advisable to enable LLC to consummate
the transfer or disposition in such jurisdictions of the LLC Shares, except that
OPS shall not for any such purpose be required (i) to qualify generally to do
business as a foreign corporation in any jurisdiction where, but for the
requirements of this Section 2.4(d), it would not be obligated to be so
qualified, (ii) to subject itself to taxation in any such jurisdiction, or
(iii) to consent to general service of process in any such jurisdiction;
(e) notify LLC, and the underwriters if any, at any time when a Prospectus
is required to be delivered under the Securities Act while the LLC Shares are
subject to this Agreement, of OPS's becoming aware that a Prospectus included in
a Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and prepare and furnish to LLC, and the underwriters if
any, a reasonable number of copies of an amendment to such Prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such LLC Shares,
such Prospectus shall not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(f) promptly notify LLC, and the underwriters if any,
(1) when any Prospectus or Prospectus supplement or pre- or post-effective
amendment has been filed, and, with respect to the Registration Statement or
post-effective amendment, when such Registration Statement or post-effective
amendment has become effective;
(2) of any request by the SEC or any other applicable regulatory authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information;
(3) of the issuance by the SEC or any other applicable regulatory authority
of any stop order of which OPS or its counsel is aware or should be aware
suspending the effectiveness of the Registration Statement or any order
preventing the use of a related Prospectus, or the initiation or any threats of
any proceedings for such purpose; and
(4) of the receipt by OPS of any written notification of the suspension of
the registration or qualification of any of the LLC Shares for sale in any
jurisdiction, or the initiation or any threats of any proceeding for such
purpose;
(g) use its best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its shareholders, as soon as
reasonably practicable, an earnings statement that shall satisfy the provisions
of Section 11(a) of the Securities Act, provided that OPS shall be deemed to
have complied with this Section 2.4(g) if it has complied with Rule 158 under
the Securities Act;
(h) use its best efforts to provide a transfer agent and registrar for the
LLC Shares covered by the Registration Statement no later than the effective
date of such Registration Statement;
(i) if the LLC Shares are to be sold in an underwritten offering, enter
into a customary underwriting agreement and in connection therewith:
(1) make such representations and warranties to the underwriters and to LLC
and any Affiliate of LLC, to the extent that LLC and such Affiliate(s) are
selling shareholders, in form, substance and scope as are customarily made by
issuers to underwriters and selling shareholders in comparable underwritten
offerings;
(2) obtain opinions of counsel to OPS (in form, substance and scope
reasonably satisfactory to the managing underwriters), addressed to the
underwriters, and covering the matters customarily covered in opinions requested
in comparable underwritten offerings, including, if requested by LLC or any
Affiliate of LLC, a statement to the effect that such opinions may be relied
upon by LLC and such Affiliate(s) of LLC, to the extent that LLC and such
Affiliate(s) are selling shareholders;
(3) obtain "cold comfort" letters and bring-downs thereof from OPS's
independent certified public accountants addressed to the underwriters and LLC,
such letters to be in customary form and covering the matters customarily
covered in "cold comfort" letters by independent accountants in comparable
underwritten offerings;
(4) if requested, provide indemnification in accordance with the provisions
and procedures of Article IV of this Agreement to all parties to be indemnified
pursuant to such Article;
(5) deliver such documents and certificates as the managing underwriters or
LLC may reasonably request to evidence compliance with Section 2.4(f) above and
with any customary conditions contained in the underwriting agreement; and
(6) make its officers and directors reasonably available for "roadshows."
(j) cooperate with LLC, and the underwriters if any, to facilitate the
timely preparation and delivery of certificates (not bearing any restrictive
legends) representing the securities to be sold under the Registration
Statement, and enable such securities to be in such denominations and registered
in such names as LLC, or the underwriters if any, may request;
(k) if the managing underwriter or underwriters or LLC reasonably request,
incorporate in a Prospectus supplement or post-effective amendment thereto such
information as the managing underwriter or underwriters and LLC agree should be
included therein relating to OPS and its business and financial condition and
the plan of distribution with respect to such LLC Shares, including, without
limitation, information with respect to the number of LLC Shares being sold to
such underwriters, the purchase price being paid therefor by such underwriters
and with respect to any other terms of the underwritten offering of the LLC
Shares to be sold in such offering and make all required filings of such
Prospectus supplement or post-effective amendment as promptly as practicable
upon being notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(l) provide LLC, any underwriter and any attorney, accountant or other
agent retained by LLC or underwriter (collectively, the "Inspectors") with (i)
the opportunity to participate in the preparation of the Registration Statement,
any Prospectus, and any amendment or supplement thereto and (ii) reasonable
access during normal business hours to appropriate officers of OPS and its
subsidiaries to ask questions and to obtain information that any such Inspector
may reasonably request and make available for inspection all financial and other
records, pertinent corporate documents and properties of any of OPS and its
subsidiaries and affiliates (collectively, the "Records"), as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility; provided, however, that the Records that OPS determines, in good
faith, to be confidential and that it notifies the Inspectors in writing are
confidential shall not be disclosed to any Inspector unless such Inspector signs
or is otherwise bound by a confidentiality agreement reasonably satisfactory to
OPS; and
(m) in the event of the issuance of any stop order of which OPS or its
counsel is aware or should be aware suspending the effectiveness of the
Registration Statement or any order suspending or preventing the use of any
related Prospectus or suspending the registration or qualification of any LLC
Shares for sale in any jurisdiction, OPS promptly will use its best efforts to
obtain its withdrawal.
LLC shall furnish to OPS in writing such information regarding LLC and its
Affiliates as is required to be disclosed pursuant to the Securities Act. LLC
agrees to notify OPS promptly of any inaccuracy or change in information
previously furnished by LLC to OPS or of the happening of any event in either
case as a result of which the Registration Statement, a Prospectus, or any
amendment or supplement thereto contains an untrue statement of a material fact
regarding LLC or omits to state a material fact regarding LLC required to be
stated therein or necessary to make the statements therein not misleading and to
furnish promptly to OPS any additional information required to correct and
update any previously furnished information or required so that such
Registration Statement, Prospectus, or amendment or supplement, shall not
contain, with respect to LLC, an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
LLC agrees that, upon receipt of any notice from OPS of the happening of
any event of the kind described in Sections 2.4(e) or (m) above, LLC will
forthwith discontinue the transfer or disposition of any LLC Shares pursuant to
the Prospectus relating to the Registration Statement covering such LLC Shares
until LLC's receipt of the copies of the amended or supplemented Prospectus
contemplated by Section 2.4(e) or the withdrawal of any order contemplated by
Section 2.4(m), and, if so directed by OPS, LLC will deliver to OPS all copies,
other than permanent file copies then in LLC's possession, of the Prospectus
covering such LLC Shares at the time of receipt of such notice. The period
during which any discontinuance under this paragraph is in effect is referred to
herein as a "Discontinuance Period."
Section 2.4. Registration Expenses. OPS will pay all Registration Expenses
in connection with the registration of the LLC Shares pursuant to Section 2.4
above, and LLC shall pay (x) any fees or disbursements of counsel to LLC or any
underwriter and (y) any brokerage commissions and fees, underwriting discounts
and commissions, transfer taxes and documentary stamp taxes, if any, relating to
the sale or disposition of the LLC Shares.
Section 2.5. Selection of Underwriters. In connection with any underwritten
offering pursuant to the Registration Statement filed pursuant to Section 2.4
above, LLC shall have the right to select a lead managing underwriter or
underwriters to administer such offering, which lead managing underwriter or
underwriters shall be reasonably satisfactory to OPS; provided, however, that
OPS shall have the right to select a co-managing underwriter or underwriters for
such offering, which co-managing underwriter or underwriters shall be reasonably
satisfactory to LLC.
ARTICLE III
Holdback Period
If one or more underwritten public offerings of shares of Common Stock
(other than the LLC Shares) by OPS occur during the period of the effectiveness
of the registration relating to the LLC Shares under Section 2.2(c) above, then,
in connection with each such public offering, OPS may require LLC and its
Affiliates to refrain from, and LLC and its Affiliates will refrain from,
selling any of the LLC Shares for a period determined by OPS but not to exceed
ninety (90) days (each such period referred to as a "Holdback Period") so long
as OPS delivers written notice to LLC of OPS's requirement of a Holdback Period,
and the length of such Holdback Period, no less than three days prior to the
inception of the Holdback Period; provided that OPS may require LLC to refrain
from selling any of the LLC Shares during no more than three such Holdback
Periods; and provided further that OPS may require LLC to refrain from selling
any of the LLC Shares during no more than two Holdback Periods in any one
calendar year.
ARTICLE IV
Indemnification; Contribution
Section 4.1. Indemnification by OPS. OPS will, and hereby does indemnify
and hold harmless, to the fullest extent permitted by law, and, subject to
Section 4.3 below, defend LLC and LLC's members, managers, employees, agents,
representatives and each other Person, if any, who controls LLC within the
meaning of the Securities Act, against any and all losses, claims, damages,
liabilities and expenses, joint or several, to which they or any of them may
become subject under the Securities Act or any other statute or common law,
including any amount paid in settlement of any litigation, commenced or
threatened, and to reimburse them for any reasonable legal or other expenses
incurred by them in connection with investigating any claims and defending any
actions, insofar as any such losses, claims, damages, liabilities, expenses or
actions arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any pre- or post-effective amendment thereto or in any Blue Sky Filing, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the indemnification
agreement contained herein shall not apply to such losses, claims, damages,
liabilities, expenses or actions arising out of, or based upon, any such untrue
statement or alleged untrue statement, or any such omission or alleged omission,
if such statement or omission was made in reliance upon and in conformity with
information furnished in writing to OPS by LLC from time to time specifically
for use in the Registration Statement, the Prospectus or any such amendment or
supplement thereto or any Blue Sky Filing. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of LLC or
any other Person and shall survive the transfer of such securities by LLC.
Section 4.2. Indemnification by LLC. LLC will, and hereby does, indemnify
and hold harmless and, subject to Section 4.3 below, defend (in the same manner
and to the same extent as set forth in Section 4.1 above) OPS and OPS's
officers, directors, employees, agents, representatives and each other Person,
if any, who controls OPS within the meaning of the Securities Act, with respect
to any such untrue statement or alleged untrue statement in, or any such
omission or alleged omission from, the Registration Statement, any Prospectus,
or any amendment or supplement thereto, if such statement or omission was made
in reliance upon and in conformity with information furnished in writing to OPS
by LLC from time to time specifically for use in the Registration Statement, the
Prospectus, and any such amendment or supplement thereto. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on
behalf of OPS or any such director, officer or any other Person and shall
survive the transfer of such securities by LLC.
Section 4.3. Notices of Claims. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Sections 4.1 and 4.2 above, such indemnified party will
give, if a claim in respect thereof is to be made against an indemnifying party,
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Article IV, except
to the extent that the indemnifying party is actually prejudiced in any material
respect by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party shall be entitled to
participate in and, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
reasonable investigation. If the indemnifying party advises an indemnified party
that it will contest a claim for indemnification hereunder, or fails, within
thirty (30) days of receipt of any indemnification notice to notify, in writing,
such Person of its election to defend, settle or compromise, at its sole cost
and expense, any action, proceeding or claim (or discontinues its defense at any
time after it commences such defense), then the indemnified party may, at its
option, defend, settle or otherwise compromise or pay such action or claim in
each case at the indemnifying party's expense. In any event, unless and until
the indemnifying party elects in writing to assume and does so assume the
defense of any such claim, proceeding or action, the indemnified party's
reasonable costs and expenses arising out of the defense, settlement or
compromise of any such action, claim or proceeding shall be losses subject to
indemnification hereunder. The indemnified party shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the indemnified party that relates
to such action or claim. The indemnifying party shall keep the indemnified party
fully informed at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense, except that the indemnifying party shall be liable for such reasonable
costs and expenses if, in such indemnified party's reasonable judgment, a
conflict of interest between such indemnified and indemnifying parties may exist
as described above. If the indemnifying party does not assume such defense, the
indemnified party shall keep the indemnifying party informed at all times as to
the status of the defense; provided, however, that the failure to keep the
indemnifying party so informed shall not affect the obligations of the
indemnifying party hereunder. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its written
consent; provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the consent of the indemnified party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a general
written release from all liability with respect to such claim or litigation.
Section 4.4. Indemnification Payments. The indemnification required by this
Article IV shall be made by periodic payments of the amount thereof during the
course of the investigation or defense as and when bills are received or
expense, loss, damage or liability is incurred, subject to the receipt of such
documentary support therefor as the indemnifying party may reasonably request.
Section 4.5. Contribution. If the indemnification provided for in this
Article IV is unavailable to or insufficient to hold harmless a party otherwise
entitled to be indemnified thereunder in respect to any losses, claims, damages
and expenses (or actions, whether commenced or threatened, in respect thereof)
referred to therein, then OPS and LLC shall contribute to the amount paid or
payable by such party as a result of such losses, claims, damages, liabilities,
expenses or actions in such proportion as is appropriate to reflect the relative
fault of OPS and LLC in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities, expenses or actions. The
relative fault of OPS and LLC shall be determined by reference to whether the
untrue statement or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by
OPS or by LLC and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. OPS and LLC
agree that it would not be just and equitable if contributions pursuant to this
Section 4.5 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to above in this Section 4.5. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
Section 4.6. Other Rights and Liabilities. The indemnity and contribution
agreements contained herein shall be in addition to (i) any cause of action or
similar right of the indemnified party against the indemnifying party or others
and (ii) any liabilities the indemnifying party may be subject to pursuant to
the law.
ARTICLE V
Miscellaneous
Section 5.1. Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing (including
telecopy or similar teletransmission), addressed as follows:
If to OPS,
to it at: Open Plan Systems, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx X
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
With a copy to: Xxxxxxxx Xxxxxx Xxxxxxxxx & Xxxxxxx
0000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Xx.,Esquire
If to LLC,
to it at: Great Lakes Capital, LLC
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telecopier: (000) 000-0000
Attention: X. Xxxxxx Settle
With a copy to: Xxxxxx Xxxxxxx PLLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Esquire
Unless otherwise specified herein, such notices or other communications
shall be deemed received (a) in the case of any notice or communication sent
other than by mail, on the date actually delivered to such address (evidenced,
in the case of delivery by overnight courier, by confirmation of delivery from
the overnight courier service making such delivery, and in the case of a
telecopy, by receipt of a transmission confirmation form or the addressee's
confirmation of receipt), or (b) in the case of any notice or communication sent
by mail, three business days after being sent, if sent by registered or
certified mail, with first-class postage prepaid. Each of the parties hereto
shall be entitled to specify a different address by giving notice as aforesaid
to each of the other parties hereto.
Section 5.2. Amendments. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated except by an instrument
in writing signed by LLC and by OPS.
Section 5.3. Successors and Assigns. Except as otherwise provided herein,
this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise; provided that no party may assign
this Agreement without the other party's prior written consent.
Section 5.4. Entire Agreement. This Agreement embodies the entire agreement
and understanding among the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter. There are no representations, warranties or covenants by the parties
hereto relating to such subject matter other than those expressly set forth in
this Agreement, the Consulting Agreement and the Stock Option Agreement.
Section 5.5. Specific Performance. The parties acknowledge that money
damages are not an adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
Section 5.6. Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
Section 5.7. No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
Section 5.8. No Third Party Beneficiaries. Except as provided in Article IV
above, this Agreement is not intended to be for the benefit of and shall not be
enforceable by any Person who or which is not a party hereto.
Section 5.9. Consent to Jurisdiction. Each party to this Agreement, by its
execution hereof, (i) hereby irrevocably submits, and agrees to cause each of
its Affiliates to submit, to the jurisdiction of the federal courts located in
the City of Richmond, Virginia, and in the event that such federal courts shall
not have subject matter jurisdiction over the relevant proceeding, then of the
state courts located in the City of Richmond, Virginia, for the purpose of any
action arising out of or based upon this Agreement or relating to the subject
matter hereof or the transactions contemplated hereby, (ii) hereby waives, and
agrees to cause each of its Affiliates to waive, to the extent not prohibited by
applicable law, and agrees not to assert, and agrees not to allow any of its
Affiliates to assert, by way of motion, as a defense or otherwise, in any such
action, any claim that it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from attachment or
execution, that any such proceeding brought in one of the above-named courts is
improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court and (iii) hereby agrees not to commence or to
permit any of its Affiliates to commence any action arising out of or based upon
this Agreement or relating to the subject matter hereof other than before one of
the above-named courts nor to make any motion or take any other action seeking
or intending to cause the transfer or removal of any such action to any court
other than one of the above-named courts whether on the grounds of inconvenient
forum or otherwise. Each party hereby consents to service of process in any such
proceeding in any manner permitted by Virginia law, as the case may be, and
agrees that service of process by registered or certified mail, return receipt
requested, at its address specified pursuant to Section 5.1 above is reasonably
calculated to give actual notice. Notwithstanding anything contained in this
Section 5.9 to the contrary with respect to the parties' forum selection, if an
action is filed against a party to this Agreement, including its Affiliates, by
a person who or which is not a party to this Agreement, an Affiliate of a party
to this Agreement, or an assignee thereof (a "Third Party Action"), in a forum
other than the federal district court or a state court located in the City of
Richmond, Virginia, and such Third Party Action is based upon, arises from, or
implicates rights, obligations or liabilities existing under this Agreement or
acts or omissions pursuant to this Agreement, then the party to this Agreement,
including its Affiliates, joined as a defendant in such Third Party Action shall
have the right to file cross-claims or third-party claims in the Third Party
Action against the other party to this Agreement, including its Affiliates, and
even if not a defendant therein, to intervene in such Third Party Action with or
without also filing cross-claims or third-party claims against the other party
to this Agreement, including its Affiliates.
Section 5.10. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic substantive law of the Commonwealth of
Virginia, without giving effect to any choice or conflict of law provision or
rule that would cause the application of the law of any other jurisdiction.
Section 5.11. Name, Captions. The name assigned to this Agreement and the
section captions used herein are for convenience of reference only and shall not
affect the interpretation or construction hereof.
Section 5.12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
Section 5.13. Expenses. Each of the parties hereto shall bear their own
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, except that in the event of a dispute concerning the terms
or enforcement of this Agreement, the prevailing party in any such dispute shall
be entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Registration Rights Agreement to be executed, as of the
date first above written by their respective officers thereunto duly authorized.
OPEN PLAN SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Chairman of the Board
GREAT LAKES CAPITAL, LLC
By: /s/ X. Xxxxxx Settle
X. Xxxxxx Settle
Manager
